Farm Horizons, August 2008
Farmers feel impact of increased fertilizer costs
Area farmers are shelling out more money than ever to pay for rapidly increasing input costs, especially fertilizer costs.
With premiums paid for grain crops, farmers can’t afford to compromise crop production by reducing inputs.
“Farmers know what they need to raise a good crop,” said Agronomy Manager Dave Eckhoff of Mid County Co-op. “Most of our customers are unwilling to compromise their crop.”
Fertilizer sales are still on track, according to Eckhoff, even with the higher price tags. Increasing prices paid out for crops may be helping a little, but not enough.
“Even though grain prices are higher, increasing fertilizer prices are following the price of fuel,” said crop farmer Craig Brose of Howard Lake.
“Sure we’re getting more bushels to the acre, but we’re taking on those increased fertilizer and input costs,” Brose explained. “All we’re doing is handling more money.”
In fact, the price of phosphate last fall was $500/ton, and this fall it’s expected to be more than $1,000/ton, according to Clem Crowley, owner of Wright Way Ag. in Howard Lake.
Last fall’s price of potash was $285/ton, and this fall it’s expected to cost at least $700/ton, and a year from now it’s expected to climb to more than $1,000/ton, according to Crowley.
“I started working in this area in 1986,” Crowley said. “Back then, liquid ammonia was $7/acre, now it’s $60/acre.”
Chuck Horstmann, a dairy, beef, and crop farmer from Howard Lake, said he’s trying to do as much of the chemical applications and fertilizing himself, as well as pre-buying and buying in bulk to keep costs in check.
Even with the increasing costs, Horstmann said he’s keeping inputs “pretty much the same.”
“If I cut back, I won’t get as good of crop production,” Horstmann said.
Even small details like not overlapping while working fields can save money, according to Horstmann, who is equipping his tractor with a GPS system this fall to take advantage of money saving technology such as an auto steer function.
“We’re looking at different ways to apply fertilizer, and we’re watching outputs now more than ever,” Brose explained.
Farmers are planning ahead and locking in their needs very early in an effort to obtain better prices and price breaks, Eckhoff said.
“The price of seed corn will be increasing next year,” Horstmann said. “It was $40/bag this year, next year it will be worse. It’s definitely better to buy it in the fall, you get a better discount.”
Eckhoff said the trend in the market is continued increased costs for fertilizer, seed, and chemicals with fuel as a wildcard.